Though it may look as if MasterCard has stolen the march toward a home banking system, Visa is not especially perturbed.

The market is still in its infancy, Visa U.S.A. officials say. The No. 1 card association is content to be deliberate in its development of a competitor to MasterCard's Master Banking program.

"We have been accused at times of a |fire, aim, ready' approach," Visa vice president William L. Powar said last week. "This time we are going to aim first."

Mr. Powar, in Chicago last week to address a Bank Administration Institute conference on home-based services, was noncommittal about the timing and details of Visa's formal entry.

Guiding Principles

He did state certain Visa principles, including the recognition that "no one cando it all, nor can anyone get involved in all the joint ventures" needed to create a complete system and product.

Like MasterCard, Visa is putting itself forward as a utility that will serve its members' interests and accommodate any of a number of emerging technologies and related services.

Mr. Powar said Visa's strategy, which includes an alliance with Intuit Inc., maker of the popular Quicken personal finance software, has been endorsed and supported by member banks. Most of those banks, as MosterCard members also, could consider the option of signing up for Master Banking.

"We formed a working group [of Visa members] over a year ago" to explore the home banking market, Mr. Powar said. "Our bankers have told us that they do not expect an announcement before January 1994."

Describing a business that is only beginning to form around numerous potential players, ranging from American Telephone and Telegraph Co. and its McCaw Cellular affiliate to the Japanese game maker Nintendo, Mr. Powar said there is a danger "betting wrong" by making decisions prematurely.

"Even if you bet right at this stage it is not at all certain that you would have any lasting advantages." Mr. Powar said.

MasterCard International enjoys at least the short-term advantage of having a product to talk about, and some customers.

Glenn F. Santmire, the senior vice president in charge of remote-service initiatives, including Master Banking, told the BAI conference that he also has an internal advantage as he sells the program: "senior management vision."

"It starts at the top of MasterCard, with [president] Pete Hart, and is also strongly supported by [MasterCard U.S. president] Peter Dimsey," who is Mr. Santmire's boss.

Indeed, Mr. Hart had a strong hand in conceptualizing Master Banking and forging MasterCard's alliance with Checkfree Corp., the Columbus, Ohio-based provider of a computerized bill-paying system.

A |Scale Business'

Convinced that the market for computer-based home services is about to take off, and that no one bank will have enough market share to be efficient and profitable, MasterCard is offering to make it a "scale business."

"Our relationship with Checkfree is exclusive, and we will create economies of scale by passing all transactions through it." Mr. Satmire said. "We will accommodate all vendors and any other products and services that complement a member's business."

Sparks are still flying between the card groups over their home banking plans, despite their apparently similar objectives.

At the American Bankers Association's bank card conference in September, MasterCard U.S. president Peter Dimsey and Visa U.S.A. president Carl Pascarella clashed over MasterCard's strategy. Mr. Pascarella suggested that Master Banking might result in a loss of control for nonbanks, while requiring banks to "fit into a packaged solution."

Mr. Dimsey called that "nonsense." The program "is designed precisely to make our members more competitive."

MasterCard officials, who claim most criticisms emanate from Visa and not from the banking community, are especially sensitive to accusations that they are promoting Master Banking as a brand name that would supersede that of participating banks.

"We think our brand is compelling, but whether or not you want to use it is your choice," Mr. Santmire said last week.

These issues did not prevent Chemical Banking Corp. from being the first major bank to sign up for Master Banking -- a development that MasterCard eagerly hurls in critics' faces. A longtime provider of home banking services, Chemical could have viewed Master Banking as an encroachmet on its turf.

Other joiners annouced last month were Capital Bank of Miami and Space Coast Credit Union of Melbourne, Fla.

Alliances -- and the idea that banks can't go it alone in home banking -- were a recurring theme at the BAI conference.

Aside from the MasterCard-Checkfree and Visa-Intuit tie-ins, Bruce A. Burchfield, president of National Payment Clearinghouse in Schaumburg, Ill.. announced the formation of a strategic alliance with Microsoft Corp.

In this case, Mr. Burchfield's company, which processes telephone bill payments for First Chicago Corp. among others, will provide the "scale" for banking transactions, while Microsoft applies its expertise to developing a consumer-friendly banking interface for the growing number of personal computers.

"We need to deliver a lot more than just the account balance and the last five checks that cleared," Mr. Burchfield said. "To do that, you need to add complementary services, and you can only do that with alliances."

Joshua Harris, president of Jupiter Communications Co., a consultant on electronic information services, foresees a "breakthrough [that] will involve the convergence of industries and a variety, of familiar and new players. This will present sent myriad opportunities to existing and new businesses."

"Alliances are going to be the key to getting this done," added Leslie Woilin, vice president of home banking at Chemical Bank.

Ms. Wollin described how Chemical reassessed its full-service home banking strategy and docided to focus on the "from end" -- delivering products and services to customers -- while moving into the Master Banking program and outsourcing some "back end" processing to MasterCard.

Home-based services require a whole new outlook on the banking business, said Bruce Luecke, vice president and director of product development al Banc One Corp., Columbus, Ohio.

"The time has come to start paying a lot of attention to the banks' role," Mr. Luecke said. "Relationships, alliances, and joint ventures are things that bankers, historically, have not been comfortable with.

"It is important to start now and be proactive, rather than reactive, which is what bankers are used to being."

Consider the Microwave

He sees a parallel in consumer-product breakthroughs like the microwave oven, which spawned an entire subindustry in food packaging and processing. He warned that banks could become "last on the food chain" as consumers develop allegiances to other brands or products such as MasterCard or Visa, Quicken or Apple.

Mr. Luecke suggested that banks faced with the proliferation of service options continue to rely on the plastic card as a tangible link to customers.

He said he hopes the card keeps its importance. "The card is something I can sell."

Dale Reistad is back, and this time his timing may be right.

One of the original "checkless society" advocates from the '60s, Mr. Reistad founded the research company Payment Systems Inc. and later headed the Electronic Funds Transfer Association. But he repeatedly ran into resistance to some of his more radical ideas, including home banking.

Now an independent consultant, he is promoting a research program called Interactive Financial Services Forum. For $22,500, a sponsor gets access to a year-long series of meetings and reports that include assessments of the market, the technology, the various remote banking devices, and the future business outlook.

Mr. Reistad said what sets this study apart, besides thoroughness, is its inclusion of small businesses as potential users of remote services.

Mr. Reistad said he has piqued the interest of institutions of all sizes. "MasterCard was the first major organization" to support the study, he said, "and we are getting interest from some major nonbank players."

He expects to announce the initial sponsors this month.

The study will be produced jointly by Global Concepts Inc. of Atlanta and James Martin Strategy of Chantilly, Va. When Mr. Reistad headed PSI, Global Concepts' president, Allen Lipis, was research director. More recently, Mr. Reistad worked at the James Martin firm.

With all the excitement about home banking and its potential complements, the Bank Administration Institute is forming a committee to plan a second annual home-based services conference.

The one in Chicago last week, in the planning for only about three months, attracted about 150 registrants.

"When we started planning, we said we would have jumped up and down if we got over 100," said Joseph S. Pendleton 3d, conference chairman, who is also senior vice president of Meridian Bank in Reading, Pa.

He said there was a pent-up demand for information, yet some people are being cagey about what they reveal.

"Even some of us who have been close to this business for 15 or 20 years need a scorecard to keep up with everything that is happening." Mr. Pendleton said. "Many of us have cards up our sleeves and are ready to play, and came to see how they fit with what everyone else is doing."

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